U. S Jury convicts Theranos’ Elizabeth Holmes of fraud, conspiracy
Elizabeth Holmes, Founder, Theranos, the defunct blood-testing startup in the U.S. has been found guilty of four counts of fraud and conspiracy related to investors by a federal U.S. jury sitting at the federal court in San Jose, California, U.S. She was found not guilty of four counts related to defrauding patients, while the jury could not conclude on three other counts. Each charge carries a maximum prison sentence of 20 years. If that verdict stands, the possibility of years in prison will send a strong message that even in Silicon Valley, to other start-up promoters who flagrantly over-hype their start-ups to gain investors’ confidence.
Holmes, who had been hailed as a female version of Apple co-founder Steve Jobs, touted a machine that could perform more than 240 clinical tests using a single finger-prick of blood. Her charisma, however, failed to sway jurors. The jury’s finding marks a rare instance of accountability for a technology executive. During the four-month trial, she took the witness stand to argue that she had always believed the technology would work and blamed Sunny Balwani, a chief former Theranos operating officer with whom she had a sexual relationship of emotional abuse. His trial on similar charges begins in 2022.
Witnesses included a money manager for the family office of former Education Secretary Betsy DeVos, which put $100 million into the startup. The four-count conviction included conspiracy to commit wire fraud against Theranos investors. Holmes had indicated the company was expected to generate $1 billion in revenue in 2015 when she knew the accurate figure was a few hundred thousand dollars, according to prosecutors.
Holmes is expected to appeal, as she faces significant prison time if the verdict stands. Each count carries a maximum sentence of 20 years, though they are usually served concurrently. Holmes did catch a break on charges related to defrauding patients, of which she was found not guilty, and the jury could not reach an agreement on three other counts.
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